The business and culture of our digital lives, from the L.A. Times

LinkedIn connects with $1-billion valuation

June 17, 2008 | 4:51
pm

Meet the $1-billion start-up and its maker.

Hot professional networking site, LinkedIn has received $53 million in venture capital funding from Bain Capital Ventures and three existing investors -- Sequoia Capital, Greylock Partners and Bessemer Venture Partners -- in exchange for a 5% stake in the Silicon Valley company.

And investors are gushing. LinkedIn has more than 23 million users and growing. It's profitable and it has a diversified revenue stream with new corporate services about to come online.

As LinkedIn catches on with more people and companies, David Cowan, a Bessemer managing partner, predicts $1 billion will be seen as a bargain.

Much of the credit goes to LinkedIn's pioneering founder, chairman and largest shareholder: PayPal veteran Reid Hoffman (pictured above). Many of the original investors came from his vast personal network. So great is Hoffman’s influence on LinkedIn that it is often referred to as "Reid’s brain."

"We knew from our experience that Reid is a special guy with special talents. We also knew of his networking prowess," Sequoia Capital partner Mark Kvamme said. "That’s what we really liked about LinkedIn: He basically built it for himself. He saw an opportunity to create a tool to build your network in a more effective way. Most great Internet companies are built by people for themselves not for fabulous economic gain."